Voluntary repayment bonus
Find out about the voluntary repayment bonus and how it can help you repay your loan faster.
- What are voluntary repayments?
- What is the voluntary repayment bonus?
- Qualifying for the voluntary repayment bonus
- When the bonus is applied
What are voluntary repayments?
Voluntary repayments are payments you make on top of what you have to repay for a tax year. These payments can be made either as a single lump sum or by smaller amounts throughout the year. Any student loan repayments you make directly to Inland Revenue will first be credited towards any overdue and current repayment obligations you may have. Any amount left over will be treated as a voluntary repayment.
Note
You can make voluntary repayments either directly to Inland Revenue or through your salary or wages by asking your employer to make extra deductions.
If your employer has deducted significantly more than what you needed to pay and you choose to leave the amount on your loan, this can count towards a voluntary repayment bonus.
What is the voluntary repayment bonus?
This is a 10% bonus you can receive for making voluntary repayments that total $500 or more in a tax year (1 April to 31 March). The bonus will generally be 10% of the voluntary repayments you make, not 10% of your loan balance.
Example
Jane's loan balance is $10,000. She makes a voluntary repayment of $800 on top of what she needs to repay for the tax year. Jane has no outstanding obligations.
Jane qualifies for a voluntary repayment bonus of $80 which is 10% of $800.
Qualifying for the voluntary repayment bonus
You may qualify for a bonus if:
- you're up-to-date with your repayments and obligations
- your total loan balance with us is $550 or more at the beginning of the tax year (1 April), and
- your voluntary repayments for the tax year total $500 or more.
When the bonus is applied
If you qualify for a bonus, we'll automatically calculate it and apply it to your account.
The timing of when this happens depends on your situation. Use the following tables to work out when the bonus should be applied to your account.
If you've repaid your loan in full
| If you've repaid your loan in full and ... | then we'll apply your voluntary repayment bonus... |
|---|---|
| had a loan advance within the last 12 months | 12 months after your last loan advance |
| not had any loan advances within the last 12 months | within 4 months of your final repayment |
If you haven't repaid your loan in full
| If you haven't repaid your loan in full, and you ... | then we'll apply your voluntary repayment bonus ... |
|---|---|
| are required to file an IR3 income tax return | within 12 weeks of your return being filed. |
| have confirmed your personal tax summary (PTS) | within 12 weeks of your PTS being confirmed |
| don't need to file a tax return or receive a PTS | by 31 October after the end of the tax year (31 March) |
| are an overseas-based borrower | by 31 July after the end of the tax year (31 March). |
Make a voluntary repayment now
Your voluntary repayment bonus will show in your account once it's applied.
Note
As when making any financial decisions, you're advised to seek appropriate financial advice before taking advantage of the voluntary repayment bonus.
Date published: 28 Feb 2012
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